Now Reading
E&M Magazine: The Ambition of the Mozambique Stock Exchange

E&M Magazine: The Ambition of the Mozambique Stock Exchange

BVM has moved up two places in the Absa Africa Financial Markets Index and launched a new strategic plan. The ambitions are set for 2028: BVM wants to reach 30 listed companies and boost the real economy.

Ahead of the days of uncertainty in Mozambique, with an impact on the country’s economy, the Mozambique Stock Exchange (BVM) has launched an ambitious new Strategic Plan: the BVM wants to reach 30 listed companies and achieve a market capitalisation equivalent to 35% of Mozambique’s Gross Domestic Product (GDP) by 2028, with the aim of boosting the real economy.

The goals are set out in the new plan for the 2024-2028 period, explained the chairman of BVM’s board of directors, Salim Valá, in an interview with Lusa. BVM currently has 16 listed companies, for a market capitalisation that represents 28.54% of GDP, figures that make the planned targets achievable, he stressed. ‘They can be achieved and surpassed through joint work between the different players in the ecosystem, using the experience and lessons learnt over the 26 years’ of the Mozambican stock exchange.

‘The financial system can be galvanised by a capital market that propels the real economy’ and “encourages medium and long-term productive investment”, said Valá, placing BVM at the centre of the financial market – a place where companies can find mechanisms to finance themselves.

Inducing ‘high performance’

All told, it would be a way of inducing ‘high performance’ in companies, ‘encouraging investors to invest their savings in listed securities with satisfactory returns’, similar to more mature stock markets. Another consequence would be greater transparency, through ‘good corporate governance and market integrity’, under the scrutiny of shareholders.

The plan for the next four years foresees growth from the current 26,305 holders registered with the Central de Valores Mobiliários (CVM) to ‘around 50,000’ by 2028

The new strategic plan is based on five ‘fundamental’ pillars, such as boosting the markets (equity and bond), technological modernisation, the development and marketing of new products, services and financial instruments, the promotion of the regulatory framework and institutional capacity building and visibility.

Focus on technological services

The plan for the next four years also foresees growth from the current 26,305 holders registered with the Central de Valores Mobiliários (CVM) to ‘around 50,000’ by 2028. In this way, the BVM would gain density and the capacity to attract companies ‘of different sizes and branches of activity, well-managed, profitable and with business ethics’, along with the entry of ‘national and foreign investors’.

The new strategic plan also provides for the adoption of ‘innovative market development mechanisms’. According to Salim Valá, BVM’s chairmans until the end of December 2024, the aim is to ‘adapt the technological platforms for trading and the CVM to international standards’, with the aim of ‘processing new business quickly and ensuring interconnection with regional stock exchanges and other financial centres of choice’.

BVM’s figures

BVM’s market capitalisation grew by almost 11% year-on-year in the first half of 2024, becoming worth the equivalent of 28.6% of Mozambique’s GDP. According to data from the institution, this market capitalisation reached 203 852 million meticals in the first six months of the year and turnover grew by 102.2% to 16 697 million meticals.

In 2024, the Absa Financial Markets Index reached its eighth edition, which revealed ‘the highest proportion of improvements ever recorded’, according to the group’s interim CEO, Charles Russon

Although the number of listed shares still corresponds to 16 companies, the number of corporate debt issues, relating to bonds and commercial paper, rose by 20 per cent from 25 to 30, the number of listed securities rose from 84 to 92 securities (+9.5 per cent), total financing to the economy grew by 8.6 per cent to 338,679 million meticals (4986 million euros) and the number of securities and holders in the CVM rose from 274 to 301 securities (+9.9 per cent) and from 25,470 to 26,074 holders (+2.4 per cent).

Mozambique Stock Exchange (BVM) rises two positions

See Also

In the Absa Africa Financial Markets Index 2024, an annual publication that analyses the performance of financial markets on the continent, BVM climbed two places, from 22nd to 20th (out of 29 countries). Mozambique gained two points thanks to ‘strong growth prospects’ and ‘easier capital controls’.

‘A new foreign exchange law came into force in April 2024, allowing for the liberalisation of some capital controls,’ notes Absa. Of the six pillars analysed, the ranking gave the highest score to the macroeconomic environment and transparency. The weakest link in the assessment was the poor development of pension funds.

In 2024, the Absa Financial Markets Index reached its eighth edition, which revealed ‘the highest proportion of improvement ever recorded’, said Charles Russon, interim CEO of the Absa group.

‘I am confident that Africa is better positioned to take advantage of the future if continued changes to market infrastructure are implemented’ to “ensure that capital flows become freer and are attracted to African economies as domestic financial conditions become more favourable,” he added.

To build the index, the group relied on the think tank Official Monetary and Financial Institutions Forum (www.omfif.org). OMFIF carried out quantitative analyses based on publicly available information and interviewed more than 50 organisations in Africa, including central banks, stock exchanges and regulatory bodies, gathering data and perceptions.

SUBSCRIBE TO GET OUR NEWSLETTERS:

Scroll To Top

We have detected that you are using AdBlock Plus or other adblocking software which is causing you to not be able to view 360 Mozambique in its entirety.

Please add www.360mozambique.com to your adblocker’s whitelist or disable it by refreshing afterwards so you can view the site.